The third year of the euro crisis might be the most important one yet – and with Germany heading for elections next September things are getting serious. In year one of the crisis (2010), Germany was lost and without a strategy, lurching through the events more than being in control. In year two of the crisis (2011) we observed a subtle U-turn und more decisive actions to safe the euro. But the German strategy was not the ‘big bazooka’, but a step-by-step pragmatic approach which certainly disappointed the Anglo-Saxon world. The strategy may be incomplete and flawed especially with respect to the pro-cyclical and painful effects of austerity policy in the South: but it is also true that we see the first signs of success.

Today, the political system in Europe at large seems in control of the crisis. This is important. Also, we seem to have a shared understanding of what exactly happened during the last two years. While political and economic crisis strategies get more differentiated, the debate about the federal future of Europe (EU Commission President José Manuel Barroso mentioned a “Federation of Nation States” in his State of the Union speech) is getting more intense in Germany and in the rest of Europe. Another key step towards a reform of the EU was yesterday’s publication of the final report of the working group on the future of Europe comprising 11 foreign ministers. The working group was launched last year following a German initiative. And importantly, the final report also received input by the French foreign ministry which was not involved in the drafting of the interim report in March 2012 because of the French presidential elections.

In comparison to the interim report, the final report does not hold breathtaking surprises. But it is more definite and written in the style of a clear road-map towards ‘more Europe’. Interestingly the report sounds similar to the preliminary report of the banking union presented by the four EU presidents in July. Language and chapter-titles are similar and in both proposals we find the same key words: “integrated budgetary framework”, “integrated economic policy framework”, “integrated financial framework” and “new democratic legitimacy and accountability”. All these terms point to the need for a stronger parliamentarian component in order to empower the “European political space”, both on the European and on the national level (Section II of the report, page 8). Europe has found its goals and its language: in essence it is about shaping a European system of a fully fletched division of power. So who will go for that?

It is needless to say that – with a few exceptions – the participating countries of this initiative look like core Europe. It’s not exactly the euro zone (e.g. Poland and Denmark are in the group), and Greece or Ireland are out, although part of the Euro, to just mention these four), but it resembles a critical mass of countries which could decide to move on with integration on a different and more speedy path. But they could also decide to move forward in a much more silent and incremental way than the recent talk about a new convention or treaty change suggest. The report says: “In a realistic view, in the long term treaty reform in a European Union of 28 or more Member States will become more and more difficult”, therefore the group suggests to “implement treaty revisions by a super-qualified majority of the EU member States and their population”). Designing more political integration (e.g. a network of national parliaments in order to enhance the EU’s legitimacy) may also come through intergovernmental arrangements like some countries did with Schengen. Under the radar of the international media German governmental sherpas were send around Europe to test the waters for treaty change that would allow the creation of a more political EU; however they came back with mixed sentiments and not much enthusiasm, especially not in the South. But many ways lead to Rome, and the “Future of Europe” group may point to a much less spectacular – nonetheless rocky – road ahead. And this may indeed generate the long awaited debate about the future of Europe.

The report also needs to be seen in context. Merkel repeated in her press conference on Monday that Europe and the Euro are indispensable for Germany. In a subtle change of language, she also said that Germany should look beyond the nitty-gritty daily quarrels about rescue umbrellas and should also think of the historical dimension of Europe. She also said that for more political ambitions for the Union, one may think about strengthening the political integration of the eurozone first. Wolfgang Schäuble himself was more outspoken on the necessity to focus on the eurozone first in order to improve political integration. In a radio interview on 14 September he said that he could imagine a eurozone parliament in order to improve legitimacy in the case of more fiscal integration.

Evidently, this creates turmoil in the European Parliament, where the consensus is that the EP cannot be split. Anxiety vis-à-vis such an idea is especially voiced in British and in Polish circles, but still different: the UK attitude these days seems to be: if you go ahead, good for you, we know you need to do it, but we may say “bye” to Europe then; the Poles instead say: go ahead, this is necessary, and we will join as soon a possible. Whatever the reactions are: a concrete debate about a European core advancing towards political union will shake up European citizens all across the union. The idea is NOT, however, to split the EU in different parts. The idea is and only must be to allow deeper integration at a smaller (or eurozone) level without alienating the rest of the EU.

But Europe is far from being close to this vision. This new effort by European government elites all across the EU to shape Europe’s future, including its strategic outreach to the world (“Europe as a global player”, Part II, a of the report) as much as a potential federal outlook for the union does not mean that citizens are convinced. In fact, they are not, as all polls (at least) for Germany and France suggest. So if it’s getting serious in Europe, the real challenge will be to make the next steps of political and fiscal integration with the citizens and not against them: Whatever this future European beast will be named and look like, this sort of a European Republic shaping at the horizon must come through the front door, not through the back door! However, with a new EU Commission to be put into place in 2014 as well as the forthcoming elections of the European Parliament in 2014, for which most parties have already decided to “run” with a single European candidate (anticipating a future direct election of the Commission president), there will hopefully be a good occasion to make this door wide open!